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Biotech / Medical : Incyte (INCY) -- Ignore unavailable to you. Want to Upgrade?

To: PashaBear who wrote (1018)	4/30/1999 5:55:00 PM
From: BradleyMarshall	Read Replies (2) \| Respond to of 3202

Fundamentally, I think Incy is a great company. I don't think you bet on the wrong horse. Yes, the patent issues are complex. But in the end there is room in the market for both Incy's and affx's chips. Why? They are fundamentally different in that affx use short probes which are better for resequencing, whose killer apps may be Single Nucleotide Polymorphisms (used in genomic mapping), viral sequencing to find which strain of HIV a person has, or tumor sequencing to look for mutations. Incytes chips are better for large scale expression analysis. The major market for this will be pharmeceutical research and possibly tumor profiling. This fits in with Incy's business strategy of targeting big pharma. Incyte has many full gene patents and years down the road will be collecting huge royalties when the drugs they have helped find hit the market. I think the reason for the recent price weakness is the fact that they have placed some major bets on areas where they may or may not be financially successful. They are 1) genome sequencing and 2) SNP discovery. There is a lot of competition in both areas and who knows if big pharma will pay Incy for this knowledge or get it some where else. Based on Incy's track record, I have to like their chances, but ya never know. The wall street guys also don't like that they have gone from profitable to losing money again. So, I think that long term, Incy's a great company. Obviously their original db business is a cash cow. I think the chip situation will work its way out and be a big winner for them. Eventually, the royalties will come pouring in. The question is whether or not these latest endeavors will pan out into greater profits long term. My guess is they probably will, but Wall Street doesn't like surprises, so I expect price weakness until this question is answered. And remember, eventually a company is valued based on earnings.